Business
Exclusive: Greenwashing? Saudi Aramco’s efforts ‘speak for themselves,’ Chairman says
With growing demand for energy, especially in developing countries, Saudi Aramco is embarking on the largest capital program in its history to prevent supply shortages and safeguard energy security while it simultaneously continues to beef up its investment in renewable energy.
However, this has been met with criticism on the global stage as many have accused the company of “greenwashing,” a term used for companies accused of making superficial or insincere sustainability efforts.
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When asked about Saudi Aramco’s response to these allegations, the company’s Chairman Yasir al-Rumayyan told Al Arabiya English in an exclusive interview that its “efforts speak for themselves,” adding that it remains committed to investing in renewable energy whilst also ensuring that it contributes to the increasing global demand for oil and gas.
“We remain committed to improving our ability to tackle emissions through our initiatives in blue hydrogen and ammonia, as well as advanced non-metallic materials with potential to enable innovative product development,” he added.
Saudi Aramco was the first company to complete a blue ammonia shipment, an achievement it registered in 2020 and – along with Saudi Basic Industries Corporation (SABIC), received the world’s first accreditation for blue hydrogen and ammonia production in 2022, which al-Rumayyan believes emphasized “the role that Hydrogen will play in the future energy systems.”
“We are also working with our partners to help reduce emissions across the whole value chain of our products, with a strong emphasis on technological innovation, research and development.”
Aramco’s role in the global green energy transition
Saudi Arabia and its state-owned oil company, Saudi Aramco, have made significant contributions to the world’s green energy transition. The company has recognized the need to reduce its carbon footprint and transition to cleaner forms of energy.
The company’s first Sustainability Report, released last year, lays out a concrete plan to reduce emissions by 2035. This plan includes investing in renewables, Carbon Capture, Utilization, and Storage, energy efficiency improvements, methane and flaring reduction, and offsets.
“Last June, our inaugural Sustainability Report outlined a number of specific interim targets for 2035, and our plan is to reduce our already low upstream carbon intensity, [which is] among the lowest in the world, by at least 15 percent by 2035, against our 2018 baseline,” al-Rumayyan said.
Aramco’s greenhouse gas (GHG) emissions management program accounts for the direct (Scope 1) and indirect (Scope 2) emissions from wholly owned and operated assets.
“We aim to reduce or mitigate net Scope 1 and Scope 2 GHG emissions across our wholly-owned operated assets, both in the Upstream and Downstream segments, by more than 50 million metric tons of CO2e annually by 2035, when compared to the business-as-usual forecast,” al-Rumayyan said.
“We are a founding member of the Oil and Gas Climate Initiative, which drives collective action at the industry level,” he added.
In October last year, Aramco unveiled its $1.5 billion Sustainability Fund, one of the world’s largest sustainability-focused venture capital funds, to invest in technologies with the potential to address climate changes.
“Recently, we announced a new CCS [Carbon Capture and Storage] Hub, which is intended to capture up to nine million metric tons of CO2 per year by 2027,” al-Rumayyan explained, highlighting the many initiatives it has launched to contribute to the world’s green energy transition.
In addition, Aramco is also developing technologies related to the Circular Carbon Economy, a framework for managing and reducing emissions by maximizing the re-use of resources to eliminate carbon costs of producing new materials.
In al-Rumayyan’s words, the Circular Carbon Economy aims to “reduce, reuse, recycle and remove CO2 emissions.”
The year ahead
With demand for oil and gas expected to grow in the year ahead, Saudi Aramco will expand its production to meet rising demand while also investing in new energy sources such as blue hydrogen, blue ammonia, e-fuels and renewables.
“Our aim is to deliver an optimum mix of reliable, affordable and more sustainable energy,” the chairman said.
“Some of our objectives include increasing our liquids to chemicals production to 4 million barrels per day by 2030, developing low-carbon ammonia production of 11 million metric tons per year by 2030, becoming a global leader in CCS, with a goal to capture, utilize or store 11 million metric tons of CO2 equivalent annually by 2035, and developing 12 GW of renewable energy capacity by 2030.”
Governments and oil companies are increasingly investing in renewable energy due to the growing recognition of the pressing need to address climate change.
The burning of fossil fuels, such as oil and gas, is a significant contributor to the increase in atmospheric greenhouse gases, which trap heat and cause global warming. This, in turn, results in a range of negative impacts on the environment, including rising sea levels, more frequent and severe natural disasters, and damage to ecosystems and biodiversity.
Renewable energy – such as solar, wind, and hydrogen – provides a clean alternative to fossil fuels that does not emit carbon dioxide and other greenhouse gases.
As the cost of renewable energy technologies continues to decline, it is becoming increasingly economically viable to invest in these energy sources.
By transitioning to renewable energy, governments and oil companies can reduce their carbon footprint and contribute to global efforts to mitigate the impacts of climate change.
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